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Posted on Wed, Apr 28, 2010 : 2:44 p.m.

$2 million transfer from DDA to city of Ann Arbor moving forward, agreement being worked out

By Ryan J. Stanton

A one-time payment of $2 million is likely to make its way from the Downtown Development Authority's coffers to the city of Ann Arbor, helping the city balance its 2010-11 budget.

The DDA's Operations Committee met today and announced a framework for discussions that are expected to lead to a new parking agreement between the city and DDA.

It's expected that the $2 million transfer will be voted on by the DDA's full governing board next Wednesday, and based on today's discussion, it appears to have all the support it needs.

DDA board member Newcombe Clark announced today he's going to bring forward a resolution to bring back beat cops downtown.

Ryan J. Stanton | AnnArbor.com

A working group of seven members of the Ann Arbor City Council and DDA governing board issued a joint memorandum today, stating they believe the $2 million transfer is necessary to advance the congruent missions of the city and DDA.

"It'll help us to move forward with the whole budget and bring amendments forward that I think will help us at least delay layoffs another year," said City Council Member Margie Teall, a member of the group.

Teall and Council Member Sandi Smith, who also serves on the DDA board, agreed the $2 million will go a long way toward solving the city's budget crunch. The city had faced a deficit of between $5.2 million and $5.8 million in its general fund for 2010-11.

"I don't know what the ramifications are as far as safety services, but certainly it will help us retain some, if not all, of those scheduled for layoff," Smith said, hopeful the money can help avoid cuts to police and fire particularly.

Under City Administrator Roger Fraser's proposed budget, 40 positions are slated for elimination in police and fire in July to save $3.6 million. Even with those cuts, Fraser's budget still includes a $1.53 million deficit, so $2 million might not go far beyond patching that hole.

The DDA's governing board voted 7-4 last month to approve a budget for the upcoming fiscal year that included a $2 million contingency. Whether the city received that money hinged on the pending renegotiation of a downtown parking agreement between the city and the DDA.

The expected $2 million commitment from the DDA is a continuation of annual payments the DDA has made to the city for years. About five years ago, the city and the DDA negotiated a contract for the DDA to operate the city's parking system. That contract required the DDA to pay the city $1 million a year over a 10-year period that will end in 2015.

The city has been drawing an extra $1 million on top of the contracted $1 million for each of the last five years, depleting the entire $10 million worth of the contract five years early.

DDA board member Newcombe Clark, who isÂ considering a run for City Council, said he ideally would like to hear that no layoffs are going to happen if the DDA ponies up the $2 million. But as it stands, there are no strings attached.

"It's just, 'Here's $2 million — here's a bailout,'" he said.

Clark engaged in a boisterous debate with fellow DDA board members today regarding the $2 million agreement, which is predicated on continued conversations between the DDA and city. Clark was successful in getting a clause added to the resolution that mandates that those discussions will happen in meetings open to the public at least once a month.

Clark said his concern is that the DDA hands the city $2 million on good faith, and none of the proposed agreements ever reach fruition.

"There hasn't been evidence in the past that would indicate that there would be positive movement, so I remain Chicken Little thinking the sky will fall because I've seen it fall," Clark said. "If it moves forward and there are public meetings where other DDA members can talk, I think it's at least a step in the right direction to see if good faith will prevail. If after a year of public meetings and nothing happens, I hope that everyone remembers this day."

Clark said he's planning to bring forward a separate resolution at next week's DDA meeting to bring back downtown beat cops. His resolution would set aside $60,000 a month as a contingency while discussions take place.

Until last summer, a handful of police officers were assigned to walk or bicycle downtown, but as part of a restructuring of the Ann Arbor Police Department, those patrols were eliminated. Some say panhandlers have become more aggressive since the city pulled beat cops off the street.

Clark said he's still waiting on the costs from the city's administration, which he claims is stonewalling him from getting the information.

"I firmly believe that the only way we'll ever get a beat cop back is if it's contracted directly, similar to how the school contracts for police officers in the school and how AATA contracts for people at Blake Transit and in Ypsilanti," he said. "The hope would be that if we contract the services directly, we'd bring back a service that was vital for the health and safety and protection and perception of downtown. We contract it, it's free from political whims, it's free from budgets, and I think it's a good use of our money."

Roger Hewitt, chairman of the DDA's Operations Committee, laid out the framework of a possible agreement today to continue the $2 million payments to the city for at least this year — with a formal agreement yet to be finalized.

Hewitt said discussions will continue, leading up to the finalization of a new agreement hopefully by Oct. 31. He summed it up the tentative framework:

The DDA would continue to pay the city $2 million a year.

The DDA would be responsible for all the public parking management and policies within the city, though certain policy decisions still would go through City Council.

The DDA would take over parking enforcement that is now currently a city function. The DDA also would take over community standards enforcement within the DDA area, which is now a city function.

The DDA would be responsible for certain city services that are now done by the city within the DDA area.

The DDA would become the engine for the implementation of development of city-owned surface parking lots within the DDA area.

Hewitt said the services in discussion include items like tree trimming, maintenance of Liberty Plaza and Sculpture Plaza, maintenance of historical markers and graffiti removal.

"We sort of philosophically kind of drew a line at the curb — the street would be the city's responsibility, and the curb and sidewalks and alleys would be the DDA's responsibility," Hewitt said. "There are many details to be worked out, but that's the approximate breakdown."

Arbor Brewing Co. owner Rene Greff, a former DDA board member, criticized DDA officials today for deciding to "write a blank check to the city for $2 million with no strings attached."

"This money will be pilfered from the parking system and even though you will deny the connection, we all know it will be paid for by struggling small businesses owners, our employees and our customers through higher parking rates, increased fines, and evening enforcement," she wrote in an e-mail to DDA officials. "There is so much that stinks about this resolution and the process that led to it that I hardly know where to begin."

Comments

Drake Hollander

Sun, May 2, 2010 : 12:11 p.m.

Yea, dissolve the DDA. Because the city has done such a brilliant job of management to date. You people really are completely clueless, aren't you. The DDA is the only thing keeping that ticking time bomb of failure that is the city of Ann Arbor from imploding. Wake from your slumber, fat and lazy Ann Arborites. You're relevance is slipping each day and soon the only feature you will have will be the university (hint: the university does not care about you).

Vivienne Armentrout

Fri, Apr 30, 2010 : 4:59 p.m.

What concerns me about this proposal is that the DDA would essentially become the government for the downtown. It is not an elected body. I would hope that the City Council would not give up its authority and responsibility for what happens downtown. Council is the only body responsive to the voters. (In theory, at least.) This sentence made the hair stand up on the back of my neck: "The DDA would become the engine for the implementation of development of city-owned surface parking lots within the DDA area." The Library Lot springs quickly to mind. The other major one is the Kline's lot (Ashley/William). Would the city council allow the DDA board to be making all development decisions related to these lots? Currently the DDA only takes action on request of council but this implies that they would be setting policy.

logo

Thu, Apr 29, 2010 : 6:54 a.m.

His first big development was turned down. He's acting like a prima donna. Clark needs to grow up.

racerx

Thu, Apr 29, 2010 : 2:34 a.m.

$2M and no control as to what it'll be used for? Are you serious? The DDA can't guarantee beat cops in the downtown area for that amount? Has a council person ever been downtown when the bars let out? There was a shooting last weekend, Fifth Ave. seemingly always has issues but the DDA has no say as to what those funds would be used for? So, paying for parking has become (again) part of the city's budget? Then there are two council members who serve on the DDA's board. Is Newcombe buying votes for current council support if he chooses to run? If it walks like a duck....

Ryan J. Stanton

Wed, Apr 28, 2010 : 8:40 p.m.

@Steve Bean Yep, you're definitely right. Thanks.

LiberalNIMBY

Wed, Apr 28, 2010 : 8:34 p.m.

"Dissolve the dda and let the city, schools, etc., have authority over all the tax revenue that the dda is now capturing. that would end this pointless back and forth." I couldn't disagree more. The DDA has helped make our downtown the best in Michigan. Plus, they've made parking a profitable enterprise. After all, if we're not going to allow for the city's population to grow, we've got to make room to have people drive in from the suburbs and park! I just hope that when the DDA takes over parking enforcement, I'll finally see a ticket on a Hummer parked in the "Compact Car Only" spaces in the structures. That would make my day.

Steve Bean

Wed, Apr 28, 2010 : 7:38 p.m.

"The DDA would take over parking enforcement that is now currently a city function. The city would also take over community standards enforcement within the DDA area, which is now a city function." Ryan, should that say that the DDA would take over community standards enforcement?

David Cahill

Wed, Apr 28, 2010 : 5:33 p.m.

Oop! I overlooked the fact that the "working group" also has on it both members of the City Council's committee. That fact is another reason the meetings should have been public. Why didn't these folks post notices that these two committees were having joint meetings? Why do it this way and embarrass themselves?

David Cahill

Wed, Apr 28, 2010 : 4:37 p.m.

I am going to raise a "process" issue. Both the City Council and the DDA had established "mutually beneficial" committees to deal with this exact issue. According to the memo, the "working group" has on it all the members of the DDA's committee. A long-standing resolution of City Council requires all the meetings of such committees to be open to the public, with notices posted. However, for the April 16 meeting, there was no such notice, and members of the public were not allowed to attend. Why weren't the meetings of the working group open? Why the secrecy?

Karen Sidney

Wed, Apr 28, 2010 : 4:32 p.m.

Does the DDA give the city $2 million and also pay the costs of parking enforcement, maintenance, etc. or are the costs of these additional tasks assumed by the DDA offset against the $2 million? Who pays to collect the tickets and who gets the ticket revenue? Offsetting the $2 million against services assumed by the DDA can produce a different result than just giving the general fund $2 million. If the 2 million has to compete against other general fund expenses, council might decide to keep fire fighters rather than to improve maintenance of downtown parks. In a February 2005 press release, former safety services director Dan Oates said that 94 was the minimum fire staffing to keep the city safe. The current proposal is to reduce that number to 74.

logo

Wed, Apr 28, 2010 : 4:03 p.m.

Dissolving the DDA would not make sense. They bring in more for the city than what the city gives up. Besides, the city would take on all the DDA's debt without the added revenue from the other governments to pay it off. DDA's are smart, why do you think every city of any size has one? Maintaining a great downtown is a key for A2.

GB

Wed, Apr 28, 2010 : 3:48 p.m.

I agree with a statement posted earlier... dissolve DDA and direct the tax revenue back to the city. Or, we could take the DDA lead and set up our own Neighborhood Development Associations, use the tax revenue to accomplish neighborhood improvements. Anyone want to second the idea?

Dalouie

Wed, Apr 28, 2010 : 3:30 p.m.

Thanks Ryan: The use of their reserves was all planned. That's why the DDA has been building the fund balance, to pay for a new structure. (About time!) The parking portion of the improvements will all be paid with parking revenues, a lot of it from the new structure itself if I remember right. It is a good deal for A2, most of the cost is being paid for by out of town commuters and the new structure will allow for more businesses to stay/locate downtown. Then in a few years I think some DDA bonds are paid off and they start to go back to building fund balances.

Ryan J. Stanton

Wed, Apr 28, 2010 : 3:06 p.m.

We previously reported on the DDA budget for 2010-11, which includes digging deep into fund balance. Read the story here. The DDA's budget for 2010-11 includes $25.8 million in spending and $20.2 million in revenue. Estimates show the DDA ending this year $5.3 million in the red. That's projected to bring the DDA's fund balance down from $14.4 million to $9.1 million. The 2010-11 budget shows the fund balance dropping further from $8.9 million to $3.3 million as the DDA heads another $5.6 million into the red next year. DDA officials say cash reserves could get as low as $2 million in the next few years as the DDA works to pay for the underground parking deck on South Fifth Avenue.

logo

Wed, Apr 28, 2010 : 3:05 p.m.

The DDA funding for this comes from parking revenues. In some cities they take it all. City government's use of the DDA has been very creative in A2 but they have not gone as far as some Michigan cities that have taken over all DDA revenues to help get through the Michigan depression, funding crisis. This is good news. Ann Arbor's finances look to be in better shape every day. If you take a look at other Michigan cities you see that A2 is doing well indeed. And without a tax increase in many years.

Bonsai

Wed, Apr 28, 2010 : 2:56 p.m.

dissolve the dda and let the city, schools, etc., have authority over all the tax revenue that the dda is now capturing. that would end this pointless back and forth.

Stop &amp; Think

Wed, Apr 28, 2010 : 2:54 p.m.

Wow, sounds to me like the DDA is buying the rights to control all the parking in DT A2! What a deal for the City. Get rid of a Dept and employees and still get 2 Mil in a bail-out. Sounds like an easy way to move $$ around. I have a question though, since when does a non-Municipality have the right to issue tickets that could put points or even suspend your Driver's Licence? This can only lead to problems.... The major issue and shame on Teal &amp; Smith-Frazer works for you, City Council, if you don't want the layoff's then say "no"! Have some Brains! The problem here is "Done in Good Faith!" I don't think Roger can be trusted! Look what he did to the Fire Dept. Who is really in CONTROL here? Sounds like a ditch effort to keep your seats!

kmgeb2000

Wed, Apr 28, 2010 : 2:29 p.m.

A few quick questions: Where does the DDA get the $2 million? Do they extect something in return? Looks like they will become a government within a government - "take over parking enforcement that is now currently a city function"

a2grateful

Wed, Apr 28, 2010 : 2:16 p.m.

"A one-time payment of $2 million is likely to make its way..." "The city has been drawing an extra $1 million on top of the contracted $1 million for each of the last five years, depleting the entire $10 million worth of the contract five years early." So, it's only a one-time payment in amount... it's a $2mil payment instead of $1mil contracted + $1mil early draw... City finance appears to be in disarray... except when it comes to funding folly... or moving money from bucket to bucket... In essence, the City's shortfall has occurred the past five years... the DDA has been bailing out the sinking Hieftje/Fraser/council boat... Is the DDA bailing bucket in danger of becoming too small? Or they have they become so cash rich that it's not a problem?